Surveyors get the measure of global standards

The federal government will be urged to adopt new global measurement standards for commercial and residential buildings as concerns grow that the ­mish-mash of state rules is causing ­widespread confusion.

The Royal Institution of Chartered Surveyors, a global industry body, is expected to complete global standards for measuring commercial buildings later this month to be followed by a similar process for residential properties later in the year.

“If adopted, it will ensure property assets are measured in a consistent way, creating a more transparent marketplace, greater public trust, consistency in the reporting of property size, stronger investor confidence and increased market stability," said
Collin Jennings
, who liaises with governments for the institution.

The inclusion of different fixtures or areas, such as car parks and air-conditioning units, can lead to measurement ­variations between markets of nearly 24 per cent, recent research shows.

For example, in some countries only air-conditioned space is included and in India off-site areas such as car parking and ­common areas can be included.

In Australia, the situation can be equally complex, particularly for overseas investors in residential property, because developers and real estate agents use measurements based on the outside of the external walls, rather than the inside, which is standard in the rest of Australia and used by banks and surveyors.

Discrepancies could lead to litigation

Lawyers warn the discrepancy could result in legal actions if disgruntled ­investors seek to revoke contracts because of disagreements with ­developers about size.

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The issue becomes even more difficult for commercial property, say industry experts.

For example, a commercial measurement in Australia includes the office area and columns. The same space in Hong Kong would include the office area, lifts, stairs, columns, exterior walls, toilets and common areas.

That means an Australian company seeking space for 100 staff overseas could be 25 spaces short by applying local measures to overseas commercial property.

Commonwealth Bank of Australia, Westpac, National Australia Bank and leading industry groups, including the Australian Property Institute and ­Property Council of Australia, have joined calls for reforms to measurement ­standards to provide a consistent and transparent system.

Big developers are also keen to see ­common standards but they warn the industry needs a co-ordinated transition so a ­competitor who is slow to align with the new standard does not get an unfair advantage.

Mr Jennings said the institution would be telling the federal government that adopting global standards could be done through regulations and example, rather than through lengthy legislative amendments.

He said the International Property Measurement Standards coalition ­pushing to introduce the changes has more than doubled in size in the past 12 months to more than 40 and includes the United States, United Kingdom, China and New Zealand.

The new standard for offices, due later this month, will boost transparency, he said. “It will provide a common language for measuring offices across international markets," he said.